CORPORATE GOVERNANCE AND COMMERCIAL BANKS PROFITABILITY: (THE CASE OF NIGERIAN BANKS)

ABSTRACT

The study examines the impact of corporate governance and bank profitability in Nigeria. The specific objectives of the study are to examine the significant relationship between corporate governance and banks’ profitability in Nigeria, to examine the impact of board size on Banks’ profitability in Nigeria, and to analyze the effect of Audit committee on banks’ profitability. Secondary data were extracted from the central bank of Nigeria statistical bulletin and the annual reports of the selected banks. The study employed a panel regression model given that the data were cross sectional and time series in nature. The findings of the study showed that the Board size was positively related to banks’ performance and had significant impact on banks’ profitability. Audit committee size is positively related to Return On Asset (ROA) a proxy for banks’ profitability but statistically not significant. The Bank size appeared to be negatively related, but statistically significant in boosting of banks’ profitability at 1% level of significance. From the findings of this study, the following recommendation are offered, in order to boost total assets (bank size), bank should make sure a huge proportion of their cash and dues are channeled to productive investment. When investments that are productive are embark upon by bank’s increase in profitability will be sure.